Sun Communities Files Prospectus with SEC

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September 12, 2012 by   - () Leave a Comment

Sun Communities Inc., a real estate investment trust based in Southfield, Mich., that owns RV and manufactured housing communities, has filed a prospectus in connection with its plan to sell 3 million shares of common stock.

Click here to read a copy of the prospectus filed with the Securities and Exchange Commisison (SEC).

Under the heading "Recent Developments," Sun noted these acquisitions:

Recent Developments

On Feb. 16, 2012, we acquired three RV communities, personal property and other associated intangibles from Blue Berry Hill RV LLC, Blue Berry Hill RV SPE LLC, Grand Lake RV and Golf Resort LLC and Three Lakes RV Park LLC,  acquired substantially all of the assets of Morgan RV Park Management LLC and Ideal Cottage Sales LLC, which are management companies affiliated with these sellers, and  entered into customary non-competition agreements with the principals of these sellers, for an aggregate purchase price of $25 million, which was paid in cash.

On July 24, 2012, we acquired an RV community, personal property and other associated intangibles from Texas Blazing Star RV Ltd., for an aggregate purchase price of $7.1 million, comprised of $4.1 million of assumed debt and $3 million of cash. Blazing Star is a recreational vehicle community with 260 sites located in San Antonio, Texas.

On July 27, 2012, we acquired a manufactured home community, personal property and other associated intangibles from Northville Crossing Venture LLC, NC Finance Company LLC and Medallion Homes Limited Partnership, for an aggregate purchase price of $32.3 million, which was paid in cash. The acquisition includes 10 manufactured homes and approximately $1.1 million of loans collateralized by manufactured homes. Northville Crossing Manufactured Home Community is located in Salem Township, Mich., and contains 756 manufactured home sites.

The company had these comments under the heading "Potential Acquisitions:"

Potential Acquisitions

On July 25, 2012, we entered into a non-binding letter of intent with regard to six Michigan manufactured home community properties totaling 3,596 sites. The letter of intent contemplates that we will acquire four of the properties totaling 1,998 sites for approximately $55.1 million in cash and the assumption of $15.7 million of debt, and certain associated homes and sales contracts for cash in the amount of the seller’s cost of the homes and the outstanding principal balances under the sales contracts.

For two properties totaling 1,598 sites which we will not acquire, it is proposed that we provide approximately $14.7 to $16.7 million of mezzanine financing subordinated to approximately $43million to $45 million of senior debt. Contemporaneously, it is proposed that we will enter into a management agreement under which we will manage these two properties. As of the date hereof, we are continuing to conduct our due diligence, we have not finalized negotiating and drafting the definitive agreements with the sellers or the senior lender and we have not reached agreement with the sellers and the senior lender on numerous material business points.

The letter of intent is nonbinding and, due to the considerable conditions that must be satisfied in order to complete the transaction, we cannot give any assurances that the sellers or the senior lender will be willing to proceed with the transaction, that we will be able to successfully negotiate and execute satisfactory definitive documents with the seller and the senior lender, that we and the senior lender will be able to satisfactorily complete our respective due diligence, that we will receive all approvals and consents, that other conditions will be satisfied or that we will ultimately close on this potential acquisition.

On Aug. 16, 2012, we entered into a purchase agreement to acquire an RV community, personal property and other associated intangibles for an aggregate purchase price of approximately $8.9 million in cash. The RV community is located in Florida and has 462 recreational vehicle sites, 37 developed manufactured home sites, 15 RV park models and 10 RV rental units. The consummation of this transaction is subject to the execution of definitive agreements and customary closing conditions. As a result, there can be no assurances as to the actual closing or the timing of any closing.


As of June 30, 2012, the company owned and operated a portfolio of 162 properties located in 18 states, including 141 manufactured housing communities, 11 RV communities, and 10 properties containing both manufactured housing and RV sites. As of June 30, 2012, the properties contained an aggregate of 55,921 developed sites comprised of 47,939 developed manufactured home sites and 7,982 RV sites and approximately 6,450 manufactured home sites suitable for development. The company leases individual parcels of land, or sites, with utility access for placement of manufactured homes and RVs to its customers.


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